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Outcome of AseraCare hospice case could hurt patients and other Medicare fraud cases

September 13, 2016

Taxpayers Against Fraud Education Fund’s amicus brief to the court says the court’s view of what the False Claims Act requires is too narrow.

A whistleblower group is asking a federal appeals court to reverse a trial court’s decision in a Medicare fraud case involving hospice provider AseraCare that could have troubling implications for future False Claims Act cases.

The nonprofit group, Taxpayers Against Fraud Education Fund (TAFEF), last week filed a friend of the court brief in support of the Justice Department’s efforts challenging a trial court’s decision in Alabama dismissing the “qui tam” (whistleblower) case alleging unnecessary medical treatment of Medicare patients by AseraCare.

The brief – written and submitted on TAFEF’s behalf by Phillips & Cohen attorneys Claire M. Sylvia, Colette G. Matzzie and Amy Easton and TAFEF attorney Jacklyn DeMar – argues that the federal district court was wrong to reject a jury verdict that AseraCare submitted claims for hospice care for Medicare patients who were not eligible because they were not terminally ill.

In the original case before the lower court, the hospice provider argued the patients were eligible because doctors certified that they were eligible and presented experts who testified that they agreed with the doctors’ decisions. The government’s experts testified that the medical records did not support the doctors’ claims.

The government’s lawyers and their experts made the case convincingly. After a deliberation in which the jury considered the records of 121 patients, the jury found 104 patients ineligible. The jury had not yet decided whether the hospice provider had violated the law because the judge had taken the unusual step of dividing up the trial. A second part of the trial was going to be held to decide whether the company knew about the situation or didn’t pay attention to problems when it should have.

But before the second part of the trial was held, the judge invalidated the jury’s decision, and then threw out the entire case. The judge stated that the government needed to show an “objective” falsehood and that expert testimony alone cannot show that a claim is false. Because the government’s experts disagreed with company’s experts and the doctors who said the patients were eligible, the judge said the claims could not be considered “false.”

TAFEF’s amicus brief to the court says the court’s view of what the False Claims Act requires is too narrow. Asking the government to pay for services that are not eligible for payment can violate the law if the company knew about it or acted recklessly or deliberately ignored the problem.

In the AseraCare case, TAFEF explains, if a patient is not eligible for hospice care, then the claim for Medicare payment is false. The judicial system relies on juries – not the judge in a jury trial – to determine which side’s argument and evidence is more credible, including deciding which experts to believe.

The court’s decision would have a narrow impact because cases do not rely only on the testimony of experts alone to show that claims are false. But in future cases involving unnecessary medical treatment, healthcare providers could try to argue that the ruling in the AseraCare case means that a statement by any physician that treatment is medically necessary and should be paid for by Medicare cannot be challenged as false. That would be bad for patients and bad for the taxpayers who foot the bill.

The case title is US ex rel. Paradies v. GGNSC Administrative Services. GGNSC is the central billing and collections office for Golden Living, which operates dozens of AseraCare facilities.

You can read, print, or save the entire brief using the below window or by clicking here.

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